Card Company Unions Demand Immediate Abolition of the Recalculation System for Eligible Costs of Merchant Fees

14 Years of Decline... Need for Realization Amid Worsening Business Conditions

Card company workers demanded the abolition of the card fee eligible cost reassessment system. They argued that the merchant fee rates, which have been repeatedly lowered for 14 years despite the downturn in the industry, should be normalized.

The Card Company Labor Union Council, consisting of Shinhan Card Labor Union and others, held a press conference on the 17th in Jongno-gu, Seoul, to make this claim. The financial authorities' eligible cost reassessment system is a procedure that analyzes the cost of merchant fees, including card companies' funding costs, risk management costs, and general management and marketing costs every three years, and adjusts the fee rates for preferred merchants accordingly.

The council criticized, "Due to political populism every election, card fees have been lowered 14 times over the past 14 years," and added, "Because of the shortsighted decision-making of the financial authorities, card companies are facing an additional fee burden exceeding 100 billion won annually."

The council also criticized the system itself as not matching the current reality. They stated, "Although credit and check card usage increased by 12.1% compared to the previous year, card fees decreased by about 4%," and argued, "Since last year, with the onset of a high-interest rate era and financial market instability triggered by Legoland, card companies' funding rates have soared to record highs, and delinquency rates have surged, putting the card industry at risk of collapse."

In fact, since the introduction of this system, fees have been adjusted four times, reducing the fees for small merchants with annual sales under 300 million won from 4.5% to 0.5%, and for small merchants with annual sales between 300 million and 3 billion won from 3.6% to 1.1?1.5%. The next reassessment is scheduled for next year.

The Financial Services Commission, which is set to announce improvement plans for the card fee eligible cost system during the third quarter of this year, is considering extending the fee rate reassessment cycle from the current three years to five years. The council emphasized, "Extending the eligible cost reassessment cycle will not resolve the difficulties faced by the card industry," and stressed, "Especially with the upcoming imposition of fees on various simple payment services such as Apple Pay, Samsung Pay, Naver Pay, and Kakao Pay, the card companies' fee policy must be completely abolished."

This content was produced with the assistance of AI translation services.